A Business Plan to Open a Portuguese Restaurant in London - Essay Example

A Business Plan to Open a Portuguese Restaurant in London Affiliation 0. Executive Summary. The paper is about a business plan for a Portuguese restaurant, Travellers restaurant, and that will get located in London. The multicultural restaurant will serve customers that desire Portuguese and American food. The business plan seeks to point out the location of the restaurant, when the company will begin, the services and products, legal structure and how the restaurant will operate. The business plan shows the marketing strategy the includes the products, price, place, people, promotion and the process along with the market segmentation and the competitive analysis. The management plan is discussed majorly for the employee’s costs and benefits. The financial plan shows the financial plan, profit and loss statements, balance sheet, Industry ratios, and addresses every possible risk and how to manage the risks along with several recommendations. Table of Contents Table of Contents 2 5.4. Financial Information 12 6.0 Risk Management 17 7.0 Conclusion 18 APPENDIXES 21 Appendix…………………………...…………………………………………………………….26 2.0. Business Analysis. The Portuguese restaurant will be a multicultural restaurant that will get to serve customers desiring Portuguese and American food. The restaurant seeks to meet every need of the diverse and growing ethnicity of the London city and targets to be the first to offer the authentic Portuguese foods. Food from the restaurant will get prepared primarily from food products that are fresh. The restaurant will have to create a Portuguese atmosphere. International music and culture will get incorporated into the restaurant using the paintings, murals and Portuguese music. The restaurant will get started in six months’ time, and the location of the restaurant will be in the north central of London city. The size of the restaurant will be 1200 square feet and will comprise of cooking area with freezer and refrigerator, counter eating area, restroom, dining area and waiting area for the takeout food. The owner’s, John Smith, prior experiences in the management of the restaurant resulted in his desire to want to manage and own a restaurant. Currently, John works at J &A Catering and Entertainment Corporation. Therefore, John Smith is the one that will operate the Travellers restaurant, and this is due to his goal of owning and operating a restaurant that he can utilize his proven experience and professional skills. His skills and experience in the restaurant business go back as far as 2007. From 2007- 2010, he worked as a cook for the Burger King Restaurant. From 2010- 2012 he operated as cook in Popeye’s Fort Wayne. At J&A Catering and Entertainment, he was responsible for managing the bar and getting to plan special events. His ability include working long hours, leading to positive direction sense, use creative skills of problem-solving and giving constructive significant criticism where necessary. His weakness is the impatience tendency though he is willing to take some risks. 3.0. Marketing Strategy. 3.1. Market Analysis. The London City is the largest city in United Kingdom, with a population that approximately adds to 175, 000. The business location of the Portuguese restaurant has a population concentration of about 100, 000 that may get served in the restaurant. The average income of the area is $27, 100 per household. The effective media buying income per household is $29, 000. The effective group buying power is 56% of households of $20, 000 and over. The target segment is 16 to 60. The median population age is 30 with ages 16 to 24 being 15.2%, age of 24 to 28 being 19%, age of 30 -42 being 16.3% and ages of 46 and over being 31% (Dunkley, 2013). Therefore, the young people are very prone to assimilation. They are mostly aware of changes that happen in their society unlike the elderly. The youth prefers to have the first-hand experience within their areas. A key market survey part that can get conducted is by using the social events data like the London festivals, Portuguese festivals and other cultural events. Mostly, majority of individuals at these festivals or events get to relate their fun in terms of the kinds of music or food they enjoy. The events develop memories that get shared with family and friends, the significant connection of music, food and people unique to a culture. The restaurant will have to establish a market audience for the restaurant. Increasingly, a number of individual will come to the restaurant not necessarily that they are hungry but also because of their desire to experience a particular or new taste. I am confident that the restaurant will be successful to generate great profits and sales. The nearest competitor that get based on this kind of restaurant that is located in Chicago, thus keeping the competition for Portuguese cuisine minimal. The proposed business locations for this Portuguese location gets already established, and it is growing rely on fast. With the opening of great sports arena nearby, the business in London city and the surrounding area grow fast. The change of percentage for the population in 2000-2010 was 2.3%, resulting in an approximate population of 77, 000 along with a projected requirement for the fast food restaurants in the location averaging to 16%. Thus, it is possible to reach the projected sale of $300, 000. 3.2. Marketing Plan. The indirect advantages and competition of the Travellers restaurant over the fast food restaurant in the location as follows: McDonald restaurant serves a great breakfast and is common for its coffee and Egg McMuffin. They do not make use of seasoning in their food. They make use of regular broilers while cooking their burgers along with lard grease in frying. The kind of cooking is mostly undesirable to a large number of customers and a great disadvantage to their business. The Burger King offers its customers with high-quality services along with a family oriented atmosphere. Its food is very expensive and unhealthy. The Pizza Hut is also an alternative food restaurant but it does not offer breakfast, and its menu is limited. The Kentucky Fried Chicken, on the other hand, does a lot of deep frying. It is not healthy for the customers, and a long wait in line is also common in that restaurant. The Travellers restaurant is planned to give meals that will take their customers to a culinary adventure. Evidently, natural food is more healthy and nutritious for the body and Travellers restaurant plans to give this healthy menu. It will often prepare fresh food products and use unavoidable and minor frozen food products portions. The Travellers restaurant will get created quite differently from the other customary American and Portuguese menu. But food items may be same to American and Portuguese foods, the special ingredients, species and preparation methods will give a unique flavor that will not match any other restaurant. The menu will be created by the finest Portuguese cook, and I sincerely hope that the customers will get to enjoy the entrees. The marketing plan for the restaurant will get designed to incorporate the consumers as a share benefactor in the business profitability. The profitability and goal for the restaurant will get attained through the customer satisfaction guarantee. There will be provision for additional items in the menu. Customer’s evaluations and suggestions will get considered. The Travellers restaurant expects to build a great enormously successful restaurant with an emphasis on service and product. Quality work creates over just a steady income, and results to an endless referrals stream, higher profits and more business. The new competitors pose a great threat to existing and related businesses; however Travellers restaurant policies comprise a strategy that will get oriented towards developing the great quality image possible. The image will get created through high quality, fresh food products, and outstanding customer services. The impact of economic and social concerns in the community play is an important role in the success in the business. In turn, the Travellers restaurant will strive in contributing to the society through employment of area residents, charities and participating in the anti-drugs campaigns. The advertising media of the restaurant will be via newspaper, radio, direct mail coupons, customer referrals, social media and telephone directory. 4.0. Management Plan. 4.1. Type of Ownership. The Travellers restaurant will be a sole proprietor ownership such that it can get contented with the limited startup capital. The plan of the owner for the instantaneous growth of this restaurant business is to reinvest the earnings. The backbone of this business will be reinvestment after the start-up. The process will ensure that there is good incorporation transition of its future. During its initial stage, the business will not exist the owner’s independence. However, the most significant sole proprietor ownership type legal aspect is its unlimited liability stature. The business owner personal assets can get seized to settle the claims that will be against the business. In this case, the owner takes the over every operation’s business aspects and decides as he, please. The small business characteristics establishment makes it more compelling and comfortable to organize in this manner. Smith will have the attorney of the business to act as a consultant upon business decisions that get connected with the laws. It is because the attorney will precisely be an expert in handling the legal records of the business. 4.2. Human Resource Management. The employees management in the service industry includes several interrelated activities; selection, recruitment, compensation, training, and supervision. The target of this process is to develop, obtain and retrain workers. The Travellers restaurant will employ between five to ten people in the future. The retail personnel recruitment will get done through potential employee’s sources from educational institutions, employee recommendations, employment agencies and within the business upon its expansion. Compensation will comprise direct monetary payments and as it progress, some indirect payments will get paid to the full-time workers. But, because it is a small business, the personnel will get paid a comfortable wage along with possible bonuses. Total compensation should be fair to both the business and the employees. In the difficult situation event, lawyer, accountant, business banker and insurance agent should get consulted. The manager will get responsible for pricing, organizing money, equipment, pricing, handling produce and individual resources. Also, the manager will arrange the environment of the organization so that the employees can attain their goals through directing their efforts on the objectives of the business. The employees will get responsible providing friendly, helpful, courteous and honest services every time. Thus, the Portuguese restaurant will get built around the special services given. 5.0. Financial Plan. 5.1. Proposed Profit. Smith will have to set goals that are consistent with his values, talent, and interests. His belief in the ability of achieving his goals will get required to succeed. The profit that will get desired by the end of the year that get decided before opening will be $4,000. With continuous planning, profits get expected to be increasing every year by 20 to 40 percent after the beginning year. While expecting to gain money, the main motivation will not be wealth, but to perform something that is extremely well. Knowing that money is an essential factor while running a business, Smith should decide not to use profits as a way to wealth, but as a success indicator of the business. On the average, the London companies make about 5% net income. The Portuguese restaurant should make enough profits to give a continuous growth via investment. There should be profit after every normal business expenses have got accounted for, comprising owner’s fair wages. 5.2. Source of financing. The Portuguese restaurant will get financed initially via combined owner’s savings, his family, friends, public offering, commercial banks, the Microloan program, and trade credit. Thus, the owner’s account of drawings will not get expected to be active until when the restaurant will get fully established or after four years of successful operations. Earnings will get reinvested, and the owner will be a worker when he is collecting his wages. The strategy ensures that the debts that will get incurred by the restaurant get paid in a very short time as possible to assist other business on the waiting list to get loans. Before the failure of the banks in 1980s, the capital funds were readily available for prospective entrepreneurs and small business people. The administration of Clinton economic reform along with small business incentives has made extra money that is available today compared to prior years. It is due often from consumer savings in the liquid investments. The SBA got a new funds influx, however, the demands are maximizing due to the growing economy. The small business owners appreciate the Urban League efforts to give programs and opportunities for the small business loans. Thus, there are high hopes for the restaurant business operations to commence in the shortest time possible. 5.3. Credit Policy. Since the Portuguese restaurant will be in its initial stages, purchases will get paid for in check and cash only. In the future, MasterCard, American Express, Visa and Discover will be accepted. In the future, the charge accounts will also get applied to the contract agreements for the food services at organized events. The credit policy needs the major policy variables establishment within accounts receivables that will get managed (Homburg, Sabine & Harley, 2009). These variables comprise deciding to whom the credit is supposed to get extended, the time length for the invoices payments and if discounts will get offered for the prompt payments. Also, it is possible to use the account receivables as the collateral for the short-termed loans. It is also possible, under the factoring arrangement to sell the accounts receivable as a discount or commercial factor to the commercial banks. Thus, this arrangement type will relieve the business on the need to make additional decisions on credit policy. Once the policy factoring gets established, the element will dictate the terms of credit. The capital policy of financial working issue deals with the account payable establishment payment policy. The suppliers mostly offer discounts on the accounts payable so as to induce prompt payment by the client. There are two key concerns in the establishment of a business payment policy. First, it is the concern about availability and cost of money. The missing the discount cost can get translated easily into an appropriate annual interest rate percentage; the shorter the period of lending, the greater the missed cost discounts. When the discount gets missed, payments should get delayed until the latest allowable date of payment. The general rule is that, business should not perform an early payment when the discount gets missed or if the discount is not there. Second, the main concern comprises establishment of the accounts payable payment policy and the effects on the credit rating of the business (Michael, 2008). The Travellers restaurant will promptly pay their payable and take discounts even when the discounts are not attractive on the basis of cost. It gets done due to the prompt payment record enhancing the reputation of credit of the future of the business access to and external financing cost. 5.4. Financial Information The following personal information is relevant as of December 31, 2016 ASSETS Bank Accounts Checking $ 900 Savings 5,000 Automobile 20,000 Real Estate 80,000 Total assets 105,900 LIABILITIES Payable Charge 300 Mortgage payable 80,000 Account (auto) 10,000 Total liabilities 90,000 NET WORTH $15,600 Bank: Fort Wayne Teachers Credit Union Lawyer: Pending   Accountant: Pending Opening Day Balance Sheet as of December 31 2015 ASSETS CURRENT ASSETS Paid Equipment $4,538.00 Prepaid Expenses 2,400.00 Supplies 35.00 Total Current Assets 6,973.00 FIXED ASSETS Furniture & Fixtures 4,122.00 Food Prep Equipment 3,905.00 Total Fixed Assets 8,027.00 OTHER ASSETS Total Other Assets 0.00 Total Assets 15,000.00 CURRENT LIABILITIES Current Liabilities 0.00 LONG TERM LIABILITIES Notes payable—Noncurrent 10,000.00 Total Long Term Liability 10,000.00 Total Liabilities 10,000.00 EQUITY Owners Contribution 5,000.00 Current Earnings 0.00 Total Equity 5,000.00 TOTAL LIABILITY & EQUITY $15,000.00 Firsts Month Operation Balance Sheet ASSETS CURRENT ASSETS Regular Checking Account $5,348.00 Payroll Checking Account 1,596.08 Special Account 62.50- Cash on Hand 300.00 Prepaid Expenses 1,600.00 Petty Cash 65.00 Supplies 35.00 Total Current Assets 8,881.58 FIXED ASSETS Furniture & Fixtures 4,122.00 Food Prep Equipment 4,405.00 Total Fixed Assets 8,527.00 OTHER ASSETS Total Other Assets 0.00 Total Assets 17,408.58 LIABILITES & EQUITY CURRENT LIABILITIES Total Current Liabilities 0.00 LONG TERM LIABILITIES Notes Payable—Noncurrent 9,000.00 Total Long Term Liability 9,000.00 Total Liabilities 9,000.00 EQUITY Owners Contribution 5,000.00 Current Earnings 3,408.58 Total Equity 8,408.00 Total Liabilities & Equity $17,408.58 Projected Balance Sheet as of December 31st 2016 ASSETS CURRENT ASSETS Regular Checking Account $14,817.80 Payroll Checking Account 2,145.12 Special Account 972.50- Petty Cash 90.00 Cash on Hand 630.00 Inventory 1,500.00- Prepaid Expenses 4,400.00 Supplies 35.00 Total Current Assets 19,645.42 FIXED ASSETS Furniture & Fixtures 6,183.00 Food Prep Equipment 8,505.00 Trucks & Automobiles 8,000.00 Accum Deprec-Furn & Fix 883.00- Accum Deprec-Food Prp Eqt 1,215.00- Accum Deprec-Trucks/Autos 1,600.00- Total Fixed Assets 18,990.00 OTHER ASSETS Total Other Assets 0.00 Total Assets 38,635.42 LIABILITIES & EQUITY CURRENT LIABILITIES Current Prt—Long Term Dbt 1,300.00 Credit Card Payable, 1,400.00 Total Current Liabilities 2,700.00 LONG TERM LIABILITIES Notes Payable—Noncurrent 11,100.00 Total Long Term Liability 11,100.00 Total Liabilities 13,800.00 EQUITY Owners Contribution 5,000.00 Beginning Capital 8,880.46 Current Earnings 10,954.96 Total Equity 24,835.42 Total Liability & Equity $38,635.42 First Month Operation Income Statement for the month ending January 31st 2016 CURRENT PERIOD RATIO: NET REVENUE YTD RATIO: NET REVENUE   THIS MONTH RATIO 11 MONTHS RATIO INCOME Sales #1 15,000.00 100.0 15,178.00 100.0 Net Income 15,000.00 100.0 15,178.00 100.0 COST OF GOODS SOLD Cost of Goods Sold #1 1,150.00 7.7 1,150.00 7.0 Total Cost of Goods Sold 1,150.00 7.7 1,150.00 7.0 Gross Profit 13,850.00 92.3 14,028.00 92.0 EXPENSES Accounting 750.00 5.0 750.00 5.0 Insurance 300.00 2.0 300.00 2.0 Legal 100.00 0.7 100.00 0.0 Maintenance & Repairs 220.00 1.5 280.00 2.0 Office Supplies 80.00 0.5 80.00 0.0 Advertising & Promotion 500.00 3.3 500.00 3.0 Bank Charges 80.00 0.5 80.00 0.0 Interest 250.00 1.7 250.00 1.0 Licenses 150.00 1.0 150.00 1.0 Postage 20.00 0.1 20.00 0.0 Rent-Office 800.00 5.3 800.00 5.0 Telephone 150.00 1.0 150.00 1.0 Disposables 0.00 0.0 118.00 0.0 Utilities 265.00 1.8 265.00 1.0 Dues & Subscriptions 150.00 1.0 150.00 1.0 Employee Meals 62.50 0.4 62.50 0.0 Entertainment 45.00 0.3 45.00 0.0 Cash Over & Short 15.00 0.1 15.00 0.0 Sales Taxes 900.00 6.0 900.00 5.0 Wages Expense 3,923.36 26.2 3,923.36 25.0 Federal Withholding 744.00 5.0 744.00 5.0 State Withholding 228.16 1.5 228.16 1.5 City Withholding 64.48 0.4 64.48 0.0 FICA 307.52 2.1 307.52 2.0 Medicare 71.92 0.5 71.92 0.0 FUTA 39.68 0.3 39.68 0.0 SUTA 24.80 0.2 24.80 0.0 Other Expense 200.00 1.3 200.00 1.0 Total Expenses 10,441.42 69.6 10,619.42 70.0 Net Operation Income 3,408.58 22.7 3,408.58 22.0 Net Income 3,408.58 22.7 3,408.58 22.0 Projected Income statement for the year ending 31st 2016 YTD RATIO: NET REVENUE 12 MONTHS RATIO INCOME Sales #1 130,000.00 100.0 Net Income 130,000.00 100.0 COST OF GOODS SOLD Cost of Goods Sold #1 17,060.00 13.1 Total Cost of Goods Sold 17,060.00 13.1 Gross Profit 112,940.00 86.9 EXPENSES Auto Expenses 960.00 0.7 Accounting 9,000.00 6.9 Insurance 1,200.00 0.9 Legal 1,200.00 0.9 Maintenance & Repairs 220.00 0.2 Office Supplies 190.00 0.1 Advertising & Promotion 2,000.00 1.5 Bank Charges 360.00 0.3 Interest 3,000.00 2.3 Licenses 600.00 0.5 Postage 240.00 0.2 Deprec Exp-Furn & Fix 883.00 0.7 Deprec Exp-Food Prep Eqpt 1,215.00 0.9 Deprec Exp-Trucks/Autos 1,600.00 1.2 Rent-Office 9,600.00 7.4 Telephone 800.00 0.6 Disposables 1,200.00 0.9 Dues & Subscriptions 240.00 0.2 Travel 1,400.00 1.1 Employee Meals 840.00 0.6 Entertainment 350.00 0.3 Cash Over & Short 40.00 0.0 Wages Expense 47,080.32 36.2 Federal Withholding 8,928.00 6.9 State Withholding 2,737.92 2.1 City Withholding 773.76 0.6 FICA 3,690.24 2.8 Medicare 863.04 0.7 FUTA 476.16 0.4 SUTA 297.6 0.2 Total Expenses 101,985.04 78.5 Net Operating Income 10,954.96 8.4 6.0 Risk Management To attain dreams need a new behavior, and the new behavior comprise taking risks. Lenders require assurance that an individual get committed towards their dreams. The owner of the Portuguese restaurant will be risking his personal assets and money, time, and reputations. Thus, there exists a total commitment towards the dream. From the lender or investor perspective, financing a new business mostly has more risks compared to investing in or lending an established enterprise. Many uncertainties disappear as business establishes its track record (Linda, 2004). Many businesses take three years to create enough ongoing income for the living wage. In the three-year, individuals living expenses along with their business equity capital should come from the owner. The restaurant plans to reserve the earning of the business to eliminate hardships like liabilities to customers and employees, guarding against property damages and owner’s death event. In order to prevent bad debts, the company will use cash only in purchases. The store will contain hidden cameras in order to protect the property, employees and clients. Other employees and the manager will get trained to spot criminals, and there will be verification of every payment made through checks. Management will also consider the risk of the business assuming in its affairs. Common sense and economic theory both argue that a risky dollar profit is less valuable compared to a certain dollar profit. The two general risk management categories should contend with financial risk and business risk. Business risk refers to the risk imposed but economic and business environment while financial risks get imposed by financial manner of the firm. But, there are no regulation rules set that guarantees success. 7.0 Conclusion It is in the plan that the restaurant, Travellers Hotel, will get located in near London City. The restaurant will have a sole proprietor ownership. In the marketing strategy, it will focus on providing natural, fresh, healthy menu to have it compete well in the market with other hotels. The starting process will get financed through owner’s savings, his family, friends, public offering, commercial banks, the Microloan program, and trade credit. Therefore, with all this in palace, it is recommended that the restaurant to do more research and integrate that knowledge with good timing. 8.0 Recommendation For a successful business plan, there are different steps that the restaurant should take. First, the company should maximize the resources it has and offered free online resources. Second, the restaurant should integrate its knowledge. It should combine knowledge from other sources and conduct more research to know what they are up to in the market. Lastly, timing is everything, and it is important for the company to have good timing in their processes as they conduct their activities (David, 2008). Every activity should be conducted according to the planned time. References Pinson, Linda. (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Dearborn Trade: Chicago, USA. Baker, Michael (2008). The Strategic Marketing Plan Audit 2008. p.3 Homburg C., Sabine K., Harley K. (2009): Marketing Management – A Contemporary Perspective (1st ed.), London. Aaker, David (2008). Strategic Market Management 2008. Dunkley A (8 November 2013). "New Lord Mayor of London takes on role for City". Evening Standard (London). APPENDIXES # ITEM COST HAVE IT?   RENT/MO $ 800 - 8 TABLES 312 No 32 CHAIRS 960 No 1 LARGE FREEZER 1,450 No 1 LARGE COOLER 1,400 No 1 FRENCH FRYER/WARMER 175 No 1 HEAVY DUTY SCALE 49 No 1 SANDWICH WORKTOP       UNDER COUNTER UNIT 1,195 No 1 GRILL 1,000 No 1 LARGE FRYER 1,000 No 2 FOOD WARMERS 250 Yes 1 case FOOD WARMER CARTRIDGES 20 Yes 6 LARGE TONGS 36 Yes 5 LARGE SPOONS 85 Yes 6 SOUP SERVERS 31 Yes 5 KITCHEN KNIVES 100 No 5 SPATULAS 30 Yes 2 CUTTING BOARDS 35 No 4 BXS (100/BX) PLASTIC PLATES 25 Yes 4 BXS (100/BX) PLASTIC KNIVES 25 Yes 4 BXS (100/BX) PLASTIC FORKS 25 Yes 4 BXS (100/BX) PLASTIC SPOONS 25 Yes 1 BX (500/BX) DRINKING CUPS 10 No 1 BX (250/BX) HOT/COLD CUPS 10 No 10 SALT SHAKERS 50 No 10 PEPPER SHAKERS 50 No 10 SUGAR HOLDERS 75 No 2 LARGE COFFEE MACHINES 100 No 12 WHITE BIB APRONS 35 No 30 4 GL PLASTIC CONTAINER W/LID 226 Yes 2 GARBAGE CANS 60 No TOTAL DOLLARS $ 9,644 Read More